PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 13, Problem 2RQ
To determine
Example for a good with a frequent change in prices and a good with an infrequent change in prices.
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A consumer has $300 to spend on goods X and Y. The market prices of these two goodsare Px = $15 and Py = $5. (LO2)a. What is the market rate of substitution between goods X and Y?
Between 1950 and 2020, the price of wheat fell dramatically from $20.23 per bushel to $4.85 per bushel.
Suppose between 1950 and 2020, the supply of wheat increased substantially due to increases in productivity, shifting the wheat supply curve to the right.
With this supply shift, the amount by which the price of wheat falls will be larger the more
the demand for wheat.
In addition, assume that between 1950 and 2020 the income of the average American increased substantially and that wheat is a normal good.
With this increase in income,
OA. the price of wheat will be unaffected.
OB. the amount by which the price of wheat rises will be smaller the higher the income elasticity of wheat.
C. the amount by which the price of wheat falls will be smaller the higher the income elasticity of wheat.
OD. the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat.
OE. the amount by which the price of wheat falls will be larger the higher the income…
Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPod music player. CEO Steve Jobs also unveiled cheaper models of its Touch music player, a touchscreen-only device. An 8-gigabyte version now costs $229, down from $299. A 32-gigabyte model costs $399, down from $499. Suppose when the price of an iPod decreases by 20 percent, the number of songs downloaded on iTunes increases by 30 percent. Based on this information iTunes are
A. a normal good.
B. an inferior good.
C. substitutes for iPods.
D. complements to iPods.
Chapter 13 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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